Editor’s Note: Giving Everyone a Place to Live

October, 2010

It’s time for a reality check on affordable housing in Hawaii. We are fooling ourselves if we think that current policies and incentives will eventually create enough homes for the tens of thousands of working families who want places of their own, but can’t afford them. The current system doesn’t come close to succeeding and no amount of tweaking is going to solve that.

Today’s most popular solution is requiring local developers to build a percentage of affordable homes each time they build market-priced homes. That works out fine if you are building multimillion-dollar homes; you raise the price of each mansion by a few hundred thousand to pay for affordable housing.

But what if you are building market-priced homes for the middle- and working-classes? The developer’s cost of building a bare-bones, three-bedroom townhome goes up because he also has to build affordable homes. So he passes the added cost onto the new homebuyer, who could barely afford the original price. The rest of us? We don’t pay a dime, but we get to feel good about “solving” the affordable housing crisis.

Of course, that solution only provides a tiny fraction of the affordable homes that we need, and it only works when developers are actually building new homes. There’s precious little of that going on right now.

There are two real solutions, neither of which is painless – don’t let any politician sell you that Brooklyn Bridge.

Solution No. 1 to our affordable housing crisis is not simple, but it starts with donations of free government land, includes no infrastructure requirements such as sewers and schools (it’s costly enough just to build the homes), and gets topped off with enough government subsidies to make the books balance. That way, all of us help pay for the high cost of affordable housing, not just the unlucky few who are buying a new home.

That’s just part of the shared pain. Solution No. 1 also include loosening the rules that raise the cost of all workforce housing in Hawaii. Yes, that means more plain-Jane homes built in your neighborhood and mine, and in that pretty vacant land you pass on your way to work or your favorite surf spot. It also means more apartment blocks that add to congestion and block somebody’s view. It involves a simple principle you may have heard of: supply and demand. Raise the supply of ordinary homes to meet the demand, and those homes will become more affordable to ordinary people.

Of course, Solution No. 2 offers a much simpler response to our affordable housing crisis and involves no initial cost on your part. It’s a message to the generation of families waiting for homes of their own: “I got mine, buddy. Too bad you missed out. I hear Vegas is still pretty cheap.”